At the company’s 2002 annual meeting of stockholders, Clifford Hudson, chairman and CEO of Sonic Corp., announced that Sonic’s board of directors had approved a three-for-two stock split that will be distributed in the form of a 50 percent stock dividend.
Sonic’s stockholders of record at the close of business on January 28, 2002, will receive one additional share for every two shares of common stock held on that date. The new shares will be distributed on February 8, 2002. The stock split—the company’s fourth since 1995—will increase the number of shares of common stock outstanding from approximately 26.6 million to approximately 39.9 million.
“We believe this stock split will place the market price of Sonic’s common stock in a more attractive range for investors,'” Hudson said. “By increasing the number of shares available for sale to the public, we also believe this action will help increase the liquidity of the company’s common stock.””
In announcing the stock split, Hudson noted that the company’s decision to split its stock again reflected Sonic’s ongoing strong performance as well as the company’s positive outlook for the coming year. Recently, Sonic reported first quarter results for fiscal 2002, which included record revenues and earnings for the period driven by accelerating same-store sales, increased new unit openings, and improved profitability at the restaurant level.
“With the proven success of our multi-layered growth strategies, we believe Sonic remains well positioned to deliver industry-leading growth in sales and profits during the balance of this fiscal year and beyond,” he said. “We continue to believe that revenues for fiscal 2002 will grow in the range of 20 percent. Overall, we believe this top-line growth, together with ongoing operating leverage, will enable us to maintain our pace for 18 percent to 20 percent earnings growth for fiscal 2002.” Hudson said the company remains comfortable with the market’s expectations for 20 percent earnings growth in the second quarter of fiscal 2002, as expressed by the current consensus estimate of $0.24 per diluted share.
Hudson noted that Sonic’s sales growth this year will reflect continued sales expansion stemming from new store development, as well as from the company’s target for 2 percent to 4 percent higher same-store sales this year, which will be fueled by ongoing new product news, higher media expenditures, and new daypart initiatives, including the expansion of the breakfast program. He said that the strong sales momentum that began in the final month of company’s first fiscal quarter ended November 2001 continued in December, with same-store sales during those two months significantly above the company’s target range.
At today’s annual meeting, Sonic’s stockholders voted to re-elect three incumbent directors to new three-year terms.
The company also announced the resignation of Kenneth L. Keymer, Sonic’s president and COO, and a member of Sonic Corp.’s board of directors since 1999, effective next month. Keymer has accepted a position with Noodles & Company, a Boulder, Colorado–based privately held chain of quick casual restaurants located in several major U.S. cities including Denver, Chicago, Milwaukee, and Minneapolis. Keymer will be president and co-CEO of Noodles & Company, sharing responsibilities with the company’s founder.
“My five-year association with Sonic has reminded me of how much I enjoy working in an entrepreneurial environment,” said Keymer. “The opportunity to play a key role in a start-up restaurant chain appealed to my own entrepreneurial spirit. I leave Sonic with a great deal of appreciation for the opportunities it provided my family and me. Sonic is one of the industry’s strongest, most unique restaurant concepts, and it has been a pleasure to be associated with the brand.”
The company announced that Pattye Moore would become president of Sonic Corp., assuming the position previously held by Keymer. Ms. Moore, previously executive vice president, has been with Sonic since 1992, when she began as vice president of marketing. “Pattye has made a tremendous impact on Sonic over the years,” Hudson said. “She’s earned this position and, I’m confident, will continue to help build the Sonic brand.”